Tie-ups, tech will help us expand: Pine Labs CEO | Economic Times

Mastercard-backed homegrown startup Pine Labs is emerging as one of South Asia’s foremost payment technology players, working closely with banks, card networks and regulators in India, Malaysia, and Singapore. Latest from its innovation lab is an acceptance solution which helps consumers make a UPI payment through QR code without scanning it.Pine Labs’ CEO Amrish Rau discusses its latest technology in the contactless domain, the company’s ambitions to gain share of rapidly digitising South Asian payments market, and its role in shaping government’s ambitious up and coming micro-lending project Kashi. Excerpts:The Economic Times (ET) The coronavirus pandemic has expedited the push towards digital – and especially contactless transactions in line with the hygiene protocols. What are the solutions Pine Labs is working on?Amrish Rau (AR) We have successfully tested initiation of the QR-based payment process from the merchant terminal using NFC. The tests are ongoing with National Payments Corp of India (NPCI), Google Pay and a few other players to test real payment scenarios. The work is towards standardising the solution across all the major apps before the full-scale launch.We have also tested ‘tap and pay’ on the Android phones for debit and credit cards using NFC. We plan on implementing these solutions in India, Malaysia and one other South East Asian market in the first phase.ET: Can you elaborate on the QR-based NFC payment for UPI?AR: This means that a merchant can initiate a QR payment via a payment terminal and the customer can pay using their smartphone based QR app without the need for scanning through the camera. The methodology of data transmission messaging sequence has been developed by Pine Labs and implementation has been done using standard NFC protocols. The process saves up to 20 seconds on average for UPI transactions through QR.ET: In the past you’ve expressed your ambition to grow business across South Asia. What is the strategy?AR: We have a laser focus now on South East Asian markets which continue to expand rapidly in terms of digital payment acceptance. We already have a strong business in Malaysia in partnership with CIMB (a universal bank) and recently partnered with Fave (a leading fintech). We will leverage these associations and bring in our own financial technology prowess to expand our footprint.ET: What is the scope for growth for India’s digital payments sector in context of the ongoing pandemic?AR: After four months into the lockdown in India, we can safely say that more than 50% of offline payments transactions are happening through digital payments. We are also seeing a wave of installment payment purchases, and the integration of digital payment solutions at the PoS devices.ET: You were a key member in the consultation group for Niti Aayog’s Kashi project. What’s the potential of this solution?AR: The mandate to us is simple, that is to work as volunteers to drive digitisation and increase the use of digital payments with an end objective to accelerate growth of India's digital economy post-Covid-19.ET: India is hugely reliant on China for its PoS demand. Are you taking steps to diversify the procurement?AR: We use standard hardware technology provided by recognized and certified providers of such hardware. Presently, we work with three different PoS suppliers in America, Europe, and China. Our strategy was never to go with a single vendor, and we will continue to do so and diversify our procurement.ET: RBI has announced a pilot for offline digital payments. What are the opportunities in this space? How is Pine Labs planning to contribute?AR: We have already demonstrated our capabilities in QR and continue to innovate around QR, NFC platforms and NFC on cards. We have also tested them with existing apps operating in India and are working closely with the NPCI to ensure mass scale adoption.ET: What is the potential for the growth of contactless payments in India?AR: With an increasing penetration of mobile phones coupled with the rapidly expanding internet infrastructure, QR payments and NFC-based transactions would be the way forward. The underlying technology needs to align with the prevailing consumer behaviour, especially the millennials and Gen Zers looking for seamless and ubiquitous payment modes that can be used both online and offline. So, the future will largely depend on the interoperability of technology.